Source of this article: Times Weekly Author: Justin Deng
The domestic civil aviation market is recovering.
July and August are the peak seasons for the traditional civil aviation market. The number of passengers has increased, and various airlines have resumed flights to popular travel destinations. Juneyao Airlines (603885.SH) released the first month of summer transportation operation data on August 3, showing that Juneyao Airlines carried more than 800,000 passengers in July, and the number of passengers carried continued to rise; among them, the overall execution volume of domestic flights has recovered to 2019. About 90% of the same period, the domestic flight execution volume at the end of July was closer to the level of the same period in 2019.
According to the data of Feichangzhun App, the actual number of passenger flights performed by domestic routes in the first month of Shuyun (July 2022) was 308,000, a decrease of 19% from the same period in 2021 and an increase of 47% from June. The average daily passenger flight volume on domestic routes reached 9,937, and the single-day passenger flight volume reached its peak on July 31, with 11,000 flights.
The Times Weekly reporter noticed that in July, it has become the norm for the single-day passenger traffic volume of civil aviation to exceed one million. On June 29, the single-day passenger traffic volume of civil aviation rebounded to more than 1 million, the first time in 2022. From July 25th to 31st, the weekly passenger volume was 8.144 million, and the daily average was 1.163 million, a month-on-month increase of 9%.
Domestic air travel in the second half of the year may be a small outbreak
In the first half of this year, the loss of the civil aviation industry exceeded 100 billion yuan.
At the national civil aviation mid-year work teleconference in July 2022, Song Zhiyong, director of the Civil Aviation Administration, said that in the first half of the year, civil aviation transportation production fell to a trough, with only 2,967 flights per day when the number of flights was the lowest in 2019. 17.8% in the same period last year, the overall loss reached 108.9 billion yuan.
According to the statistics of Times Weekly reporters, the total net profit attributable to the parent company of the 8 listed airlines is -73.45 billion to -64.28 billion, and the five A-share listed airports have a total pre-loss of 3.67 billion -3.902 billion yuan , only Xiamen Airport (600897.SH) achieved a small profit in the first half of the year. The financial report forecast shows that the net profit attributable to the parent of Xiamen Airport is 8 million yuan to 10 million yuan, a year-on-year decrease of 93%-95%.
Since May, passenger traffic in the three major civil aviation markets—Beijing-Tianjin-Hebei, Yangtze River Delta and Guangdong-Hong Kong-Macao—has accelerated. Data from the Civil Aviation Administration shows that in May and June this year, the growth rate of civil aviation passenger traffic was 53.2% and 82.2% respectively.
Among them, the speed of freight recovery is faster. According to data from the Civil Aviation Administration, in the first half of this year, air cargo recovered to a relatively high level. International freight has achieved positive growth. In the first half of the year, a total of 3.077 million tons of cargo and mail were transported, recovering to 87.5% of the same period in 2019. In June, the overall scale of civil aviation cargo and mail transportation has recovered to 89.7% of the same period in 2019. Among them, the scale of international air cargo increased by 1.8% over the same period last year.
The “Passenger Travel Demands and Willingness in the Second Half of 2022” released by the third-party consulting agency CAPSE shows that 51.2% of passengers are very confident in air travel, and 34.6% are relatively confident in air travel. This shows that under the domestic epidemic prevention and control policy, passengers have a positive attitude towards air travel.
CAPSE pointed out that business travelers and tourists are expected to increase the number of trips and the proportion of expenditures are high, and domestic air travel will usher in a small outbreak in the second half of the year.
Air China plans to increase its purchase of 22 aircraft by 10 billion
On the evening of August 2, Air China (601111.SH) announced the 2022 non-public offering A-share stock plan, the scale of fixed increase financing is as high as 15 billion yuan. Net proceeds after deducting issuance expenses, 10.8 billion yuan will be used to introduce 22 aircraft projects, and 4.2 billion yuan will be used to supplement working capital.
The target of this private increase includes no more than 35 specific targets, including AVIC Group, the controlling shareholder of Air China. AVIC Group plans to subscribe for no less than 5.5 billion yuan in the fixed increase plan in cash. After the completion of this fixed increase, AVIC Group will remain the controlling shareholder of Air China. The remaining specific targets are mainly investors such as fund companies, securities companies, insurance companies, asset management companies and trusts.
According to Air China’s announcement, with the increase in the global vaccination rate and the introduction of oral specific drugs for the new crown, the demand for air passenger transport is gradually recovering. The purpose of this fixed increase is to strengthen the fleet, improve the capital structure and supplement working capital.
At the end of 2019, the end of 2020 and the end of 2021, Air China’s asset-liability ratios were 65.55%, 70.50% and 77.93%, respectively. The asset-liability ratio remained at a high level and showed an upward trend year by year. “The purchase of aircraft with the funds raised through this non-public offering is more conducive to the company’s control of the scale of interest-bearing liabilities, thereby reasonably controlling financial expenses, improving profitability, and strengthening the level of financial stability,” Air China said.
This is the second major purchase of aircraft by China Civil Aviation this year.
In July, China Southern Airlines (600029.SH), Air China and China Eastern Airlines (600115.SH) issued purchase announcements at the same time, and the three state-owned airlines purchased a total of 292 A320NEO series aircraft. Based on the list price, the total value of the three orders is about 37.257 billion US dollars (about 250 billion yuan), which is the largest passenger aircraft order of China’s civil aviation in the past three years.
The two large-scale purchases with a total investment of over 260 billion yuan are regarded as a strong signal of the recovery of civil aviation from the three state-owned airlines. Many airlines have added domestic routes.
Juneyao Airlines said that starting from August 6, Juneyao Airlines plans to use Boeing 787 to resume daily Shanghai-Urumqi flight operations, which will also be the longest domestic direct flight that Juneyao Airlines has resumed 787 operations so far. flight. From August 14th, Juneyao Airlines’ first resumed Hong Kong-bound route will also set sail from Nanjing, Jiangsu.
Long Long Airlines, another private airline company, has opened 24 new routes and 3 encrypted routes in Xinjiang, Northeast, Southwest and other major summer tourist destinations.
International flights are recovering. Since June, many airlines have added international flights. China Southern Airlines has resumed seven international routes successively since June. The number of international flights has increased from 36 to 48 per week, and the number of navigable countries has increased from 20 to 27.